Mortgage Seekers: Have You Considered Fort Wayne, Indiana?
Yes. Fort Wayne, Indiana.
It isn’t just among the most affordable places to buy a house in the United States. A new study places it at the top of the list among major urban markets in Australia, Canada, Ireland and New Zealand, along with right here in America.
The 3rd Annual Demographia International Housing Survey by the Winnipeg-based Frontier Centre for Public Policy employs a “median multiple” formula to rate affordable housing. Fort Wayne, Regina (Canada) and Youngstown (Ohio) all tout median multiples of 2.0, with anything less than a 3.0 considered affordable.
It goes without saying that Indiana mortgage costs in the Fort Wayne area represent some of the best deals not just in the Hoosier State, but pretty much everywhere else.
The median multiple of a city arrived at by looking at the median housing prices divided by median household income, and, the study says, recommended by the United Nations and World Bank for assessing housing affordability.
Of the 159 markets in the study, 59 are rated “severely unaffordable,” 22 “seriously unaffordable,” 36 “moderately unaffordable” and 42 “affordable.”
The affordable list has a heavy dose of America’s Midwest region. On top of Fort Wayne and Youngstown, the list features Dayton and Indianapolis (tied for fourth), Akron, Ohio (eighth), Grand Rapids, Mich., and Toledo, Ohio, (tied for ninth) and Northwest Indiana (tied for 15th).
Not surprisingly, two of the three most expensive markets surveyed were in the Golden State. With California mortgage costs pushing half a million on average, Los Angeles leads the markets rated most unaffordable, followed by San Diego and Honolulu.
Chicago, with a median multiple of 4.5, was rated the most expensive city in the Midwest in which to house-hunt. A median multiple in the range of 4.1 to 5.0 is “seriously unaffordable,” according to the study.
The study says the supply of land largely drives home prices:
“Where there are significant constraints on the supply of land for residential real estate development, housing inflation has occurred. Where there are no such constraints, housing cost inflation has not occurred.”
Other factors include zoning regulations, the local mortgage rates, local economic performance, and other population demographics.